How Do You Create An S Corporation?
An S corporation is an extremely popular type of corporate entity for small start-up businesses. The S corporation features a number of structural advantages, including the avoidance of double taxation and limited liability for corporate shareholders. The most important feature of an S corporation is an exemption from federal income tax. Instead, shareholders include their share of the corporation’s income, deductions and losses on their personal tax returns. Draft a shareholder agreement between you and your colleagues with whom you are starting the corporation. A shareholder agreement spells out the rights and responsibilities of the shareholders of the company and is a particularly important document for small businesses. A lawyer can assist in drafting the shareholder agreement. Contact the Secretary of State in the state where you will incorporate and obtain a Certificate of Incorporation. Fill out the Certificate of Incorporation and file it with the Secretary of State. Many stat
